Traces lead to Zug: Why does the crypto exchange Binance have a lawsuit?

One of the companies is Binance. The accusation from the SEC is that the crypto company’s two platforms were not properly registered. But investors were also misled by mailbox company Sigma Chain.

Now it turns out: the headquarters of the Sigma Chain company is located in Switzerland, more precisely, in Zug. According to the trade registry, the company operates at Gubelstrasse 11. According to the SEC, customer deposits were transferred through the Zug-based company, artificially inflating the platform’s trading volume.

Until 2019, Changpeng Zhao (46), the founder and CEO of Binance, was registered as the responsible person on Sigma Chain. The company is now represented by Guangying Chen. He is the chairman of Binance’s board of directors. A Markus Felix Spillmann (55) from Zurich is also registered. He will also be on the board of directors. Almost nothing can be learned about either. According to US authorities, the Zug company is still controlled by Zhao. However, he denies the allegations.

Crypto assets are securities

The exchange supervisor isn’t just trading against Binance. Coinbase also has a case. The SEC classifies Coinbase’s crypto assets as securities, which means they must be properly registered. Accusation: Coinbase operates an illegal U.S. stock exchange. The crypto company also offers other financial services without the necessary approval. However, the company has not yet made a statement.

Coinbase even allowed a fist exchange with the SEC. The crypto platform’s blog said: “We asked the SEC for sensible crypto rules for Americans. Instead, we received legal threats.”

Bitcoin is recovering

Since then, cryptocurrencies have embarked on a real roller coaster ride on the stock market. On June 5, Bitcoin dropped to $25,740. But since then, the price has recovered and stabilized at $27,000.

Things look a little worse for Binance Coin (BNB). Within a day, the price dropped from $305 to 277 francs. Currently at 279 francs. The Coinbase cryptocurrency lost even more: it fell from $64 to $51. That’s a drop of more than one in five. On Wednesday alone, the cryptocurrency registered minus 12 percent.

Good luck and bad luck go hand in hand in Switzerland. Bad luck because Sigma Chain is located in Zug. And luckily, because Switzerland is far ahead in terms of crypto regulation. Since the fiasco surrounding the FTX crypto exchange, the US Securities and Exchange Commission has been taking tougher action. Damage from FTX is estimated at $1.8 billion.